LEAD TIME

REDUCTION
LEAD TIME REDUCTION
• THE IMPORTANCE OF LEAD TIME REDUCTION CANNOT BE OVERSTATED. IT
TYPICALLY LEADS TO
1. THE ABILITY TO QUICKLY FILL CUSTOMER ORDERS THAT CAN’T BE FILLED
FROM STOCK.
2. REDUCTION IN THE BULLWHIP EFFECT.
3. MORE ACCURATE FORECASTS DUE TO A DECREASED FORECAST HORIZON.
4. REDUCTION IN FINISHED GOODS INVENTORY LEVELS. THIS IS TRUE BECAUSE
ONE CAN STOCK RAW MATERIALS AND PACKAGING MATERIAL (OR
SUBASSEMBLY) INVENTORIES TO REDUCE FINISHED GOODS CYCLE TIME.
LEAD TIME REDUCTION STRATEGIES

• DISTRIBUTION NETWORK DESIGNS

• EFFECTIVE INFORMATION SYSTEM (E.G., EDI)
• TRANSFERRING POINT-OF-SALE (POS) DATA FROM THE RETAILER TO ITS
SUPPLIER
THANK YOU!!! 